Consortium to pursue superchip

The Department of Energy,Intel, AMD, Motorola and the premier U.S.-owned
research labs have formed a company that will seek to devise a new
semiconductor manufacturing process resulting in smaller, faster
processors by 2002.

The consortium is also tasked to keep the U.S. at the forefront of the
semiconductor field worldwide, said Secretary of Energy Federico Pena,
adding that its endeavor should boost revenue for domestic supercomputer makers,
equipment manufacturers, and the national labs themselves.

The Extreme Ultraviolet Limited Liability Company--the name of the company
formed by the government and the semiconductor makers--will be dedicated to
creating a manufacturing process around "extreme ultraviolet" waves, or EUV.

EUV has a shorter wavelength than ultraviolet light, which semiconductor
manufacturers now use to "mask" or map out chip designs, said Gordon Moore,
chairman emeritus of Intel.

The current process yields chips with lines .25 microns across and can
probably be used to make two more generations of chips with lines as thin
as .18 and .13 microns. Refining the process beyond that will prove
difficult because "you can't make images much thinner than the wavelength
of the light making the images," Moore said. The industry will hit this
barrier in mass production in six months to 2 1/2years.

EUV represents the current best alternative, Moore said. Problems have been
experienced with x-rays. Electron beams are thin enough, but require
manufacturers to etch one line at a time, a consuming endeavor.

"It's an extension of what's already been done," said Nathan Brookwood, a
semiconductor analyst at Dataquest.
"X-ray lithography, which IBM has tried, is completely different."

"If this is successful, the product will be much better supercomputers,"
said Bruce Tarter, a scientific representative from Lawrence Livermore. The
process can also be translated to regular PCs, Tarter added.

Potentially, that also means further income for Intel, mused Chris Villard,
an analyst at International Data
Corporation. Proprietary chips are becoming harder to justify for
supercomputers. If the consortium improves standard chip design, there is
no reason to think these processors can't be used for supercomputer-class
machines, mused observers. Neither Intel nor AMD have any appreciable
share of the supercomputer chip market. (Intel is an investor in CNET the
Computer Network.).

Under the terms of the agreement, the three semiconductor manufacturers
will put up $250 million for further research and costs over the next three
years. Intellectual property relating to EUV that comes out of further
research becomes property of the consortium. Intellectual property that is
tangential to EUV reverts to the labs.

The agreement, called a cooperative research and development agreement, or
creda, is the largest the Department has ever created, said Pena.

Although the arrangement means that three major semiconductors are getting
exclusive access to government-sponsored research, Pena claimed that the
agreement benefits the lab. Funding for EUV projects for the most part was
been phased out close to 18 months ago.

The parties further stated that safeguards have been set up in the creda to
ensure that U.S. companies, or at least U.S. residents, benefit. The new
technique is expected to result in a boon market for semiconductor
equipment makers. To participate, an equipment maker must be of U.S. origin
or at least open an office in the U.S. within two years after signing a
contract to make EUV manufacturing tools.

"The government has an important role to play in facilitating the advance of
technology, especially because the payoff at the end is so great," said
Jeff Weir, a spokesman for the Semiconductor Industry Association. "Foreign
countries know this, that's why in Korea and Japan you have direct
relationships between government and industry, particularly the chip
industries."

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